This is an administrative expense which reports the fees incurred by a company for the expenses associated with its checking account transactions.
This is an administrative expense which reports the fees incurred by a company for the expenses associated with its checking account transactions.
A revenue account that reports the sales of merchandise. Sales are reported in the accounting period in which title to the merchandise was transferred from the seller to the buyer.
This term is often associated with an investment in the bonds issued by another corporation if the bonds are traded on a bond exchange.
See separation of duties.
This financial statistic is the net income of a corporation after income tax (less any preferred dividends) divided by the weighted average number of shares of common stock outstanding during the same period of time.
See bond sinking fund.
Preferred stock that is callable by the issuer at a certain price. The price and other conditions are disclosed in the preferred stock’s indenture.
The net amount of revenues and gains minus expenses and losses for the current year for the sole proprietorship owned by R. Smith. After the financial statements are prepared for the year, this amount will be transferred...
The U.S. government agency responsible for federal income tax regulations.
See stockholder.
This current liability account reports the amount a company owes the state governments as of the balance sheet date for the state income taxes withheld from its employees’ salaries and wages.
Under the accrual method of accounting, the account Salaries Expense reports the salaries that employees have earned during the period indicated in the heading of the income statement, whether or not the company has yet...
See income statement. To learn more, see Explanation of Income Statement.
Preferred stock where the dividend could be more than the original, stated dividend.
Journals other than the general journal. Special or specialized journals include the cash receipts journal, the cash disbursements journal, the purchases journal, and the sales journal.
One of the main financial statements of a nonprofit organization. This financial statement reports the amounts of assets, liabilities, and net assets as of a specified date. This financial statement is similar to the...
Investments in common stock, preferred stock, corporate bonds, or government bonds that can be readily sold on a stock or bond exchange. These investments are reported as a current asset if the investor’s intention...
In activity-based costing this refers to the allocation of costs to activities. For example, allocating the costs of setting up the manufacturing equipment to run a batch of product to the activity “setup...
A selling expense account shown on the income statement in order to match this expense to the related sales.
See dividends in arrears.
Financial Statements Video Training Part 8 Balance sheet: working capital, current ratio, financial leverage, notes to financial statements, comparative balance sheets Must-Watch Video Learn How to Advance Your...
The situation where manufacturing service departments provide service to each other. For example, the factory maintenance department provides services to the factory administrative department and the factory...
Obligations not reported as liabilities on the balance sheet.
The point at which several products emerge from a common process.
A restricted asset for the purpose of retiring a bond.
Financial Statements Video Training Part 13 Statement of cash flows: cash flows from operating activities, cash flows from investing activities, cash flows from financing activities, quality of earnings Must-Watch Video...
The amount of free cash flow divided by the weighted average number of common shares of stock outstanding during the year.
See exchange of similar nonmonetary assets.
Also referred to as operating expenses. These expenses are reported in the period in which they were incurred, not the period in which they were paid.
A highly summarized balance sheet
An income statement with at least two columns of amounts. The column of amounts that is closest to the words will contain the amounts for the most recent period of time. The columns furthest from the words will be the...
Taxes assessed by states to cover unemployment benefits paid to unemployed workers who have been laid off or terminated by a company for specified reasons. This tax is paid by the employer but is computed by multiplying...
Financial Statements Video Training Part 9 Income statement: revenues, cost of goods sold, expenses, nonoperating items Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your...
One of the main financial statements (along with the income statement and balance sheet). The cash flow statement reports the sources and uses of cash by operating activities, investing activities, financing activities,...
An employee’s pretax compensation that is based on annual or monthly amounts rather than an hourly rate. Management employees are usually paid salaries. To learn more, see Explanation of Payroll Accounting.
The depreciation method that results in the same equal amount of depreciation expense for each full year over the life of the asset. See Explanation of Depreciation for an illustration and further discussion of...
The accounting and reporting standards developed by the International Accounting Standards Board (IASB). IFRS are used by business entities in most countries. The most notable exception is the U.S. where business...
This is a non-operating or “other” item resulting from the sale of an asset (other than inventory) for less than the amount shown in the company’s accounting records.
See inventory shrinkage.
The time required to set up a piece of production equipment.
Featured Review
"I'm a financial controller (formerly). During Covid, we were laid off! I have an associate, bachelor, and MBA in accounting, as well as 35 plus years of experience! Now, for the past few years, I have owned my own accounting firm. I became a PRO user because I needed access to a valid source of readily-available, easy-to-find information. I have researched and found the PRO membership to have the information I need. I like that the materials are easy to find and to understand. I've purchased AccountingCoach PRO for two of my employees as well to earn their certifications. This is also my go-to when I need to have a legitimate source for my clients. Almost all of my clients are from different industries and have different reporting requirements. Cash or accrual, percentage of completion, etc. Simple things, like where other income and expenses go, and how it affects gross margins if categorized incorrectly. I have been able to keep up with almost all of the accounting methods. This material has been far better than any I have found so far! Right at my fingertips, it's not easy finding a valid source of information on the internet! I keep myself sharp and knowledgeable with this material in order to help my clients by providing accurate financial data they can rely on to maintain, grow and make informed decisions. I'm now a construction industry accountant/fractional CFO, and construction is booming. More and more construction businesses are on the rise, and very few accountants have access to this kind of accounting knowledge!" - Terry K.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: